nuru hassan selemani 3 others vs mr kuku farmers ltd 2 others 2023 tzhccomd 323 6 september 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO.26 OF 2023 BETWEEN NURU HASSAN SELEMANI.......................................................... 1stPLAINTIFF AZIZA ABUBAKARI HANCHA......................................................2ndPLAINTIFF HASSAN ABUBAKARI HANCHA.................................................. 3rdPLAINTIFF HAWA ABUBAKARI HANCHA..................................................... 4thPLAINTIFF VERSUS MR. KUKU FARMERS LIMITED............................... 1st DEFENDANT BRAVO FEEDS MILL LIMITED.............................. 2nd DEFENDANT TARIQ S. MACHIBYA............................................ 3rd DEFENDANT DEFAULT JUDGMENT A.A. MBAGWAJ. The 1st, 2nd' 3rd and 4th plaintiffs are natural persons and residents of Dar es Salaam working for gain within the United Republic of Tanzania. On the other hand, the 1st defendant and 2nd defendant are limited liability companies incorporated under the laws of the country while the 3rd defendant is a natural person and a director of the 1st and 2nd defendants. The plaintiff's claim against the defendants is compensation for breach of agreements and loss of profit. It is contended that on divers dates i between January and October, 2022 the 3rd defendant solicited and induced the plaintiffs to enter into agreements namely, management and marketing agreements and lease agreements with the 1st and 2nd defendants respectively. In the lease agreements, the plaintiffs rented 23 acres each from the 2nd defendant, BRAVO FEEDS MILL LIMITED for growing maize. In addition, the plaintiffs signed agreements with 1st defendant for purpose of providing management and marketing services. It was the contention of the plaintiffs that the 1st defendant was, under the contract, responsible for supervision and overall management of crops in the farm including seeding, fertilization, irrigation, harvesting, management and sale on behalf of the plaintiff. The plaintiff stated that in fulfilling their contractual obligations, they paid into the 1st and 2nd defendants' bank accounts a sum of TZS 116, 025,000/= being rental fee and management services fee but the defendants failed do their part. The plaintiffs lamented that they issued the defendants with demand notices dated 7th November, 2022 and 22nd February, 2023 to no avail. Consequently, the plaintiff instituted the present suit against the defendants severally and jointly praying for judgment and decree in the following orders; (a) An order for immediate payment of the total sum of Tanzania shillings two hundred forty-four million seven hundred seventy- five thousand (TZS 244,775,000/=) being compensation for breach of contract, loss of income for the whole period of contracts and actual payment effected to the defendants under their instructions. (b) That the defendants be jointly and severally ordered to pay interest on (a) above at the rate of 12% per annum from March 2023 to the date of judgment. (c) A declaration that the defendants are in breach of the agreements executed between the defendants with the plaintiffs. (d) A declaration that the defendants did solicit, induce and with fraudulent intent, executed the agreements with the plaintiffs. (e) General damages to be assessed by the Court. (f) Interest on the decretal sum at the court rate of 7% per annum from the date of judgment to the realization of the entire decretal sum. (g) That the defendants be jointly and severally condemned to pay the costs of this suit and (h) Any other relief the Honourable Court may deem fit and just to grant. 3 Upon filing the plaint, this Court, on 30th day of March 2023 ordered the plaintiff to serve the plaint to the defendants. Thus, on 22nd May, 2023 Ms □alia Mohamed, learned counsel for the plaintiff informed the Court that the defendants were duly served through the court process server on 4th April, 2023. To fortify the information, the learned counsel produced in Court an affidavit affirmed by a court process server one Athuman Hassani substantiating the service. Despite adequate service, the defendants neither filed a written statement of defence nor entered appearance to defend their case. As such, on 22nd day of May 2023, this Court, upon application by the plaintiff's counsel, granted an order for ex parte proof pursuant to rule 22 of the High Court (Commercial Division) Procedure Rules. Consequently, the plaintiff's counsel filed an application for default judgment via Form 1. Further, the plaintiffs filed an affidavit jointly affirmed by the plaintiffs. The affidavit was accompanied by the agreements in dispute, four receipts dated 13th July, 2022 and two demand notices dated 7th November, 2022 and 22nd February, 2023. In brief, the plaintiffs' evidence as gleaned from the affidavit and annexures may be summarised as follows; 4 On diverse dates between January and October, 2Q22 the plaintiffs severally entered into agreements with 1st and 2nd defendants in relation to agrobusiness. It was established through the lease agreement dated 30/01/2022 that on 30th day of January, 2022, the 1st plaintiff, NURU HASSAN SELEMANI entered into lease agreement with the 2nd defendant, BRAVO FEEDS MILL LIMITED. According to the lease agreement, the lessor, BRAVO FEEDS MILL LIMITED agreed to lease its land measuring eleven (11) acres atTZS 255,000 per acre to the 1st plaintiff for purposes of growing maize. The said land is located at Mnyenzani area in Mkinga District within Tanga Region. Further, as per clause 2.7 of the lease agreement, the lessee, 1st defendant appointed MR. KUKU FARMERS LIMITED, the 1st defendant to be the manager of the farming project. Consequently, on the same date i.e., 30th January, 2022, the 1st plaintiff entered into another agreement termed as Management and Marketing Agreement hereinafter to be referred to as (MMA) with the 1st defendant, MR. KUKU FARMERS LIMITED. The purpose of the 2nd agreement was to provide consultancy and managing services in relation to the farming activities. The agreement (MMA) provided, among other things, that the 1st defendant would deliver consultancy and managing services at TZS 66,000/= per acre. It was further the term of the management and marketing agreement that when the crops are ready, the manager, 1st 5 defendant would sell the maize on behalf of the plaintiff at TZS 50,000/= for each bag. It was estimated that the project which covered eleven (11) acres would produce 275 bags thereby making sale proceeds of TZS 13, 750,000/= at the price TZS 50,000/= per a bag. The MMA dated 30th January, 2022 was amended through addendum dated 29th March, 2022. Further, the evidence adduced was to the effect that on 13th October, 2022 the plaintiffs severally entered into lease agreements with the 2nd defendant for purpose of growing maize. According to the lease agreements dated 13th October, 2022, the 2nd defendant, BRAVO FEEDS MILL LIMITED leased its land located at Simanjiro area in Manyara Region to the plaintiffs. Each plaintiff was given twenty-three (23) acres for farming project at rental fee of TZS 255,000/= per acre. According to clause 2.7 of the lease agreements (annexure Corn 1), the plaintiffs agreed to appoint the 1st defendant MR. KUKU FARMERS LIMITED to be the manager of the farming project. As such, the plaintiffs also signed management and marketing agreements with MR. KUKU FARMERS LIMITED. It was the contract term under clause 2.1 of the management and marketing agreements that the plaintiffs were required to pay MR. KUKU FARMERS LIMITED a consultancy and managing service fee of TZS 66,000/= per acre. Further, clause 3.2. required each plaintiff interested 6 in the consultancy and managing services to deposit TZS 5,100,000/= into the 1st defendant's bank accounts namely, NBC Bank Account No. 011103039843 and Equity Bank Account No. 3003211761800. According to the payments receipts (annexure Corn 2) apparently issued by the 2nd defendant, each plaintiff paid a total of TZS 25,500,000/= being both rental and consultancy cum managing service fee. The plaintiffs further testified through the joint affidavit that despite payments of the rental and consultancy fees, the defendants did not discharge their contractual obligations as such, the plaintiff suffered loss. It was further the plaintiffs' evidence that they reminded the defendants to remedy the default but they adamantly neglected or refused to heed to the terms of contract. To support their contention, the plaintiff produced two demand notices dated 7th November, 2022 and 22nd February, 2023. In the end, the plaintiffs urged the Court to find their claims proved and consequently grant the orders sought in the plaint. Having gone through the pleadings and evidence adduced and taking into account that this is a default judgment, the only issue for determination is whether the plaintiffs have proved their claims to the balance of probabilities. The plaintiffs' contention is that the defendants breached the terms and conditions of the lease agreements and management and marketing agreements (MMA). The plaintiffs have vehemently stated that they performed their obligation by paying rental and consultancy fees but the defendants failed to honour the said contracts. I have keenly navigated through the contracts in disputes (annexure corn 1 to the affidavit of proof). Clause 2.2 of the lease agreement is loud and clear that the 2nd defendant leased each acre atTZS 255,000/= thus making a total of TZS 23,000,000/= for 23 acres which were leased. Furthermore, clause 2.6 requires the plaintiff to bring seeds and fertilizers within thirty (30) days of effecting payment of rental fee. The clause provides; 'That, the lessee shall bring inputs say (maize, seeds, fertilizer and pesticides and management consultant) within 30 days from the date ofpaying the leasing fee. Failure to do that within 30 days, the rental duration shall start to count immediately'. Moreso, clause 2.1 states clearly that consultancy and management services was rendered at TZS 66,000/= per acre. In addition, clause 2.5 allows the 1st defendant to sell the crops once they are ready. It provides; 'That, the customer (plaintiff) agrees that, when the maize (corn) are ready to be sold, the manager shall sell such maize on behalf of the customer and for each 1 bag of maize shall be Tshs 50,000/= 8 7 and the expected return for 23 acres shall be 575 bags of which once sold shall be total of Tshs 28, 750,000/=. The extracted provisions above are contained in the contracts which have been produced by the plaintiffs as their evidence. The plaintiffs strongly lament that the defendants failed to honour the contractual terms but throughout the evidence nowhere they mentioned a particular contractual term which the defendants failed to perform. Admittedly, on reading the contents of disputed agreements, it is common cause that the contractual terms are detrimental to the plaintiffs. However, it is the law that parties to a contract are bound to perform the contractual terms unless there is proof of fraud, misrepresentation, violation of public policy or incapacity. See the cases of Abualy Alibhai Azizi vs Bhatia Brothers Ltd [2000] TLR 288 and Simon Kichele Chacha vs Aveline M. Kilawe, Civil Appeal No. 160 of 2018, CAT at Dar es Salaam. Upon a thorough appraisal of the plaintiffs' evidence, it suggests two contradictory version. One, the plaintiffs have persistently pleaded fraud but did not provide any evidence to vindicate the alleged fraud apart from mere allegations that the 3rd defendant fraudulently induced them to enter into agreements and two, the plaintiffs contend that the defendants failed to discharge their contractual obligations but they could not specifically 9 z state which obligations were those. In my considered view, the plaintiffs ought to establish fraud so that the agreements in dispute could be invalidated or they ought to establish the contractual duties which the defendants allegedly failed to honour. Having painstakingly assessed the evidence in whole, I failed to locate sufficient evidence establishing breach of the contractual obligations on the part of the defendants nor was I able to find fraud. The cumulative observations above lead to one conclusion to wit, that the plaintiffs have failed to establish their case to the required standard. In the event, I dismiss the suit. Since the case was not defended, I make no order as to costs. It is so ordered. The right to appeal is explained. A.A. Mbagwa JUDGE 06/09/2023 10